Tue, May 6, 10:07 AM (7 days ago)
**Ford Motor Credit Company LLC (F/25M) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** Total financing revenue increased by 10% to $3.35 billion, driven by growth in retail financing and operating leases. - **Profit Margins:** Net financing margin improved significantly by 63% to $953 million, reflecting better financing margins and higher revenue. - **Earnings:** Net income rose by 81% to $424 million, with earnings before taxes increasing by 79% to $580 million. - **Cash Flow:** Net cash provided by operating activities was $804 million, up from $958 million in Q1 2024, reflecting higher net income and changes in working capital. **Key Metrics:** - **Total Net Receivables:** Increased by 5% to $141.6 billion, driven by higher consumer financing and a larger operating lease portfolio. - **Loss-to-Receivables (LTR) Ratio:** Increased to 63 basis points, reflecting higher repossessions and increased loss severity. - **Return on Equity (ROE):** Improved to 12.3%, up from 7.0% in Q1 2024, driven by higher net income. - **Credit Loss Reserve:** Remained stable at $881 million, reflecting a balanced approach to credit risk management. **Quarterly Performance Discussion:** - **Revenue Growth:** Driven by higher retail financing and operating leases, partially offset by lower dealer financing. - **Profitability:** Improved due to better financing margins and higher revenue, offset by increased credit losses. - **Cash Flow:** Positive cash flow from operating activities, supported by higher net income and changes in working capital. **Trends and Uncertainties:** - **Trade Policy and Tariffs:** Potential impacts from trade policies and tariffs could disrupt supply chains and increase costs. - **Economic Outlook:** Uncertainties in the economic environment may affect consumer spending and credit quality. - **Regulatory Environment:** Changes in regulations could impact financing operations and credit risk management. **Future Operations Impact:** - **Strategic Initiatives:** Focus on supporting Ford and Lincoln dealers, managing credit risk, and maintaining a strong balance sheet. - **Risk Management:** Continued emphasis on prudent risk management, including credit risk, residual risk, and liquidity management. - **Funding Strategy:** Diversified funding sources, including term unsecured debt, term asset-backed securities, and retail deposits. **Conclusion:** Ford Motor Credit Company LLC demonstrated strong financial performance in Q1 2025, with significant improvements in revenue, profit margins, and earnings. The company continues to manage credit risk effectively and maintain a robust liquidity position, positioning it well for future challenges and opportunities.